Safehaven | Throw the Baby Out with the Bath Water

June 08, 2008

Throw the Baby Out with the Bath Water
by Bill West

6/8/2008 6:59:50 PM

Welcome everybody

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Trade Actions:

Sell Short RCD Consumer Discretionary @ 39.5 or Better
Buy FBT Biotech @ 23.2 or Better

Market Outlook/Potential Opportunities:

The US Stock Market probably still has another Major leg to the downside. There might be some backing and filling to the upside, but I believe the Stock Market is in trouble. Still there are pockets of strength, but they seem to be throwing the baby out with the bath water as seen by our Emerging Cancer Fund, which got stopped out. Biotech is also looking good and we are trying to enter into it at our price. We also are trying to set up Short positions. We did get a decent entry on the Ultrashort SRS , but our attempt to short RCD consumer discretionary is breaking down too fast and does not appear to give us a safe entry. Still looking at ITB home construction and IAT regional banks as shorts, but need a rally to sell into. We will also be looking at a few more shorts in the Stock Market. You cannot sell short in an IRA, so I am looking at a couple of funds that you can buy, which are short on that index. Timing is critical for these shorts. I was and still am looking for a little better rally to sell into. Not sure if it will happen though. For those of you that cannot get short an Index, these Short and Ultra short Funds will do that for you. We are looking OK on our Inflation Hedges. Nuclear should perform well with oil prices moving up but Livestock broke down and hit our stop. Palladium and Biofuel and Water will definitely kick it up. That is why I would prefer not to have a stop on them. We also got stopped out of the Taiwan fund. I wanted to take a bigger profit on the last move up, but it just missed our upside target.

Current Long Portfolio:

Long CGW Global Water @ 25.55	It closed at 25.80	No Stop
Long ( 2 ) PAL Palladium Fund @ 6.55	It closed at 5.36	No Stop
Long SRS Ultrashort Real Estate @ 84.80	It closed at 88.46	No Stop
Long NLR Nuclear Energy @ 32.59	It closed at 34.93	No Stop
Long FUE Elements BioFuel @ 10.0	It closed at 10.52	No Stop

Current Short Portfolio:

REM Mortgage Real Estate Investments Trust @25.2 It closed at 24.40 No Stop

Recently Closed Positions

Long DBB @ 25.60	Stopped Out @ 24.5
Long EWT iShares Taiwan @ 15.65	Stop out @ 16
Long COW iPath Livestock@ 44.39	Stop Out @ 43.5
Long HHJ Emerging Cancer @ 16.28	Stop Out @ 15

Thank You

If you have any questions you can e mail me bill@stockbarometer.com.

Bill West
Fat Pitch ETF Advisory

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